Pentagon, Senate lawmakers already at odds over 2015 budget cuts

Thursday - 3/6/2014, 4:12am EST

Jared Serbu reports.

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A day after formally submitting the 2015 budget proposal, the Pentagon's top leaders appeared on Capitol Hill to defend it for the first time. And the spending plan doesn't appear to have won any fast friends.

Appearing before the Senate Armed Services Committee, Defense Secretary Chuck Hagel and Joint Chiefs Chairman Gen. Martin Dempsey told lawmakers they can continue to defend the country under declining Defense budgets, but at a higher degree of risk, and only if Congress agrees to go along with a package of cost saving measures that are already proving unpopular.

The budget includes proposals to redirect funds to military operations and readiness through "efficiency" initiatives that aim to save $93.6 billion over five years, plus another set of military compensation changes that would save about $30 billion.

Just about every element of the package had at least one detractor on the committee.

Sen. Kay Hagan (D-N.C.) was particularly bothered by the personnel recommendations.

"The department is laying out a number of proposals that would negatively affect military compensation. While I understand the significant fiscal challenges that the department faces, we just can't seek to balance the budget on the backs of our service members," she said. "These proposals include a lower pay raise, increased out-of-pocket costs for housing, lower savings at the commissaries and increased TRICARE fees. I'm particularly concerned about the combined impact of all of these benefit cuts."

A glimmer of hope?

But Defense officials say at least some of their needed budget savings will have to come from pay and benefits, which they say have grown in cost by 85 percent since 2001. Dempsey said he believes a majority of service members would be OK with the changes to their benefits, as long as the reforms happen in a single package, rather than through smaller scale tinkering year after year.

"It pains me to hear the characterization of balancing the budget on the backs of our service men and women," he said. "You know, this weighs heavily on all of us. The fact is that the manpower costs can be anywhere from a third to a half of our budget, and we're trying to find about 10 percent of what we need to balance the budget out of that account and 90 percent of what we need out of the rest of the budget. So we've been extraordinarily careful not to take some kind of templated approach to this. It's been very carefully managed."

But even members who expressed a glimmer of willingness to consider pay and benefit changes opposed the idea of making them right away.

On Wednesday, Sens. Saxby Chambliss (R-Ga.) and John Warner (D-Va.) introduced legislation that would forbid any military benefit changes until the Congressionally-chartered Military Pay and Compensation Modernization Commission issues its final report next year.

And Sen. Lindsay Graham (R-S.C.), who agrees that the compensation system does need some adjustment to make it more sustainable, also said now is not the time.

"Whether or not I agree with each proposal, I hope the Congress will back you up as to how we sit down and look at future retirement benefits," he told the DoD leaders. "Grandfather everybody, but whether or not you should be able to retire at half pay for the rest of your life when you're 42 needs to be put on the table. That's why I'm waiting on the commission when it comes to TRICARE reforms, when it comes to looking at everything, including commissaries. Count me in on reforming the military. Count me out when it comes to gutting the military."

Defense officials also got pushback on their plan to reduce the size of the Army to between 440,000 and 450,000 soldiers, including suggestions that DoD had not taken adequate steps to trim its civilian and contractor workforce first.

Undersecretary Robert Hale, DoD's comptroller, said the department is planning to cut its civilian force by 5 percent over the next five years. And further reductions are complicated by Congress' unwillingness to go along with DoD's own proposals, such as another round of base realignment and closure.

"The way to cut civilians is BRAC," he said. "Because when you get rid of a (brigade combat team), you don't get rid of civilians automatically. You need to close the facility where they work, if you no longer need it, then you can get rid of them. So if we're going to see sustained reductions, we need your help in allowing us to close unneeded infrastructure."